Do casinos cheat?

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Let’s start with a quick sorting of definitions. If you merely say that cheating is being dishonest, then there are both honest and dishonest casinos. The honest casinos comply with regulations, file required reports, and train their employees to abide by the law. Once in a while an honest casino will arrest its own employees for cheating.

The dishonest casinos are intentionally breaking the law. Don’t expect them to file accurate regulatory reports or call the police when their employees do something wrong.

And yet some argue that because casinos only offer games that come with a “house edge”, a theoretical percentage that favors the house, they’re really cheating the players. This subjective point has been debated many times from many angles.

Are you merely paying for entertainment or are you throwing your money away?

Is it the casino’s fault if you have a gambling problem?

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That doesn’t really address the question of whether a casino cheats.

Cheating versus Stacking the Odds

Although we usually say “odds” when thinking of probabilities, the gambling industry uses “odds” to refer to the amount of money a casino stakes against your wager. Say you lay down $100 on a single number on a roulette table. The casino offers 35-to-1 odds on European roulette. That’s a high payoff, but gambling math enthusiasts love to use roulette to demonstrate how the odds differ from the probabilities. You have a 1-in-37 chance of the roulette ball landing on that number.

In this game it’s clear that if everyone bets the same amount on a different number, and 36 players pace bets at the same time, then the casino is guaranteed to keep 1/36 of the wagers. 35 of the players will lose their money but 1 player wins back 34 times his original wager (plus the wager itself).

In this unlikely scenario two people win: the house and the lucky player.

So is the casino cheating the players or is it merely taking a statistical “fee” for running a fair game?

The odds are stacked in the casino’s favor, ever so slightly. If you feel that is cheating then the lesson to be learned here is to not play roulette.

But if you are okay with the casino taking enough money to pay its bills and make a profit, then may the odds be ever in your favor.

Cheating versus Bad Gambling

In a completely fair game of chance neither side has an advantage over the other. You’re both staking a wager on the unknown outcome of an event, like a sporting event or the spin of a slot machine. One player’s wager may be proportionately greater than the other. Ideally that higher stake is comparable to the likely outcome of the event.

Here’s an example:

How likely is it that you’ll get five of a kind in draw poker?

On a video poker game the casino pays a really high prize for five of a kind (in games that allow that result). It just doesn’t happen often.

Another tenet of fair gambling is that both players know what they are doing. When it comes to the general gambling population, casinos do often have an advantage. Either players are trying out new games whose rules are unfamiliar to them, or the players may be tired or inebriated

It doesn’t help that casinos create an environment that helps you forget the time or drift into a semi-mesmerized state of mind.

If a gambler is playing with impaired judgment the casino has an unfair advantage.

But the casinos argue they don’t force players to drink. Nor do they require you to gamble continuously.

While critics argue that the casinos create fantasy environments that lull the alert mind into a dull state, the casinos counter that argument by pointing out that players can leave at any time. The casinos also offer entertainment venues, dining and restroom facilities, and shops. Members are welcome to get up, walk around, and do something other than play games.

It’s up to you to decide how you spend your time in the casino.

On the other hand, the casino wants you to you to play games. They create an atmosphere that makes you feel comfortable while playing games. The casinos’ strategy is to remain just on the right side of the line versus cheating and benefiting from a player’s poor judgment.

Cheating versus Declared Theoretical Returns

Gambling writers devote many words to explaining and analyzing “theoretical return to player” and “house edge”. These are two sides of the same coin. When the math is done correctly, both percentages add up to about 100% (allowing for rounding errors).

What the house doesn’t keep is supposed to be reallocated to the players.

Through the years writers have discussed how much the percentages on slot games matter and whether casinos adjust them. On older, mechanical machines there was, in fact, a switch that floor managers could use to change the approximate theoretical return to players.

Modern games now rely on computer software that is burned into special chips. The chips have to be replaced or reprogrammed in order to change the theoretical return to player. All of these changes have to be made according to regulations set by government authorities.

In other words, floor managers no longer just “flip a switch”.

The problem with studying theoretical returns, however, is that they are based on probability distributions. Probability distributions only accurately depict the data against which they are calculated. That data either comes from past games (which do not predict future results) or from simulated games (which do not predict future results). When computed against enough data these probability distributions indicate about how much money the players should retain (altogether, and not allowing for putting wins back into games) and how much money the casinos should keep.

In reality, a probability model could (and probably will ) be wildly wrong over a short number of plays. The fact that a player takes his winnings and gambles them on future games also alters the distribution. A theoretical return to player or house edge assumes that every wager is a new stake. Few players use only fresh wagers; most of us roll our winnings over.

Given all these variables, why should a casino cheat if it already has a statistical edge not once but twice over?

The risk versus potential reward is awful.

Cheating versus House Rules and Terms of Service

Players may not realize it, but legitimate online casinos pay close attention to all the terms they ask players to agree to. When you join an online casino or any casino’s rewards program, you agree to follow certain rules. Players who just assume they know the rules may run afoul of them. These player mistakes sometimes lead to disagreements and complaints, especially when casinos withhold winnings.

It is the player’s responsibility to read the terms of use and all applicable rules. Some online casinos have been known to break up these player agreements, displaying them in different parts of their websites.

Here’s an example:

You may agree to one set of rules when you join a casino.

But when you enter a tournament or take advantage of a special promotion you may be required to agree to another set of rules (explicitly or implicitly) that only apply to that tournament or promotion.

If casinos make it hardfor players to piece together all the rules they agree to abide by, then there’s a fair argument for saying the casinos are giving themsel

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